Chapter9PlanningSupplyandDemandintheSupplyChain:ManagingPredictableVariabilityTrue/False1.Predictablevariabilityischangeindemandthatcannotbeforecasted.Answer:FalseDifficulty:Easy2.Facedwithpredictablevariabilityofdemand,acompany’sgoalistorespondinamannerthatmaximizesprofitability.Answer:TrueDifficulty:Easy3.Theadvantageofcarryingenoughmanufacturingcapacitytomeetdemandinanyperiodisverylowinventorycosts,becausenoinventoryneedstobecarriedfromperiodtoperiod.Answer:TrueDifficulty:Easy4.Thedisadvantageofcarryingenoughmanufacturingcapacitytomeetdemandinanyperiodisthatmuchoftheexpensivecapacitywouldgounusedduringmostmonthswhendemandwaslower.Answer:TrueDifficulty:Easy5.Theadvantageofbuildingupinventoryduringtheoffseasontokeepproductionstableyearroundliesinthefactthatafirmcouldgetbywithasmaller,moreexpensivefactory.Answer:FalseDifficulty:Moderate6.Thedisadvantageofbuildingupinventoryduringtheoffseasontokeepproductionstableyearroundistheexpensivecapacitythatwouldgounusedduringmostmonthswhendemandwaslower.Answer:FalseDifficulty:Easy7.Anapproachwhereafirmworkswiththeirretailpartnersinthesupplychaintoofferapricepromotionduringperiodsoflowdemandwouldshiftsomeofthedemandintoaslowperiod,therebyspreadingdemandmoreevenlythroughouttheyearandreducingtheseasonalsurge.Answer:TrueDifficulty:Moderate8.Withsupplyanddemandmanagementdecisionsbeingmadeindependently,itiseasiertocoordinatethesupplychain,therebyincreasingprofit.Answer:FalseDifficulty:Moderate9.Afirmcanvarysupplyofproductbycontrollingproductioncapacityandinventory.Answer:TrueDifficulty:Easy10.Afirmthatusesflexibleworkhoursfromtheworkforcetomanagecapacitytobettermeetdemandisusingaseasonalworkforce.Answer:FalseDifficulty:Moderate11.Schedulingtheworkforcesothattheavailablecapacitybettermatchesdemandisusingtimeflexibilityfromtheworkforce.Answer:TrueDifficulty:Moderate12.Theuseofapart-timeworkforcetoincreasethecapacityflexibilitybyenablingthefirmtohavemorepeopleatworkduringpeakperiodsisdesigningproductflexibilityintotheproductionprocesses.Answer:FalseDifficulty:Moderate13.Afirmthatusesatemporaryworkforceduringthepeakseasontoincreasecapacitytomatchdemandisusingaseasonalworkforce.Answer:TrueDifficulty:Easy14.Theuseofdualfacilitiestomanagecapacitymaybehardtosustainifthelabormarketistight.Answer:FalseDifficulty:Hard15.Afirmthatpurchasespeakproductioncapabilityfromothercompaniessothatinternalproductionremainslevelandcanbedonecheaplyisusingsubcontracting.Answer:TrueDifficulty:Easy16.Afirmthatbuildsdedicatedfacilitiestoproducearelativelystableoutputofproductsovertimeinaveryefficientmannerandpurchasespeakproductioncapabilityfromothercompaniesisusingsubcontracting.Answer:FalseDifficulty:Hard17.Afirmthathasproductionlineswhoseproductionratecaneasilybevariedtomatchdemandhasdesignedproductflexibilityintotheproductionprocesses.Answer:TrueDifficulty:Easy18.Theuseofaseasonalworkforcerequiresthattheworkforcebemulti-skilledandeasilyadapttobeingmovedfromlinetoline.Answer:ModerateDifficulty:Hard19.Theuseofcommoncomponentsacrossmultipleproducts,witheachproducthavingpredictablyvariabledemand,willresultinthedemandforthecomponentsbeingrelativelyconstant.Answer:TrueDifficulty:Moderate20.Whenmostoftheproductsafirmproduceshavethesamepeakdemandseason,theuseofcommoncomponentstocreaterelativelyconstantoveralldemandinthecomponentsisfeasible.Answer:FalseDifficulty:Moderate21.Whenmostoftheproductsafirmproduceshavethesamepeakdemandseason,itisnecessarytobuildproductsduringtheoffseasonthathavemorepredictabledemand.Answer:TrueDifficulty:Easy22.Operationsusuallymakesthepromotionandpricingdecisions.Answer:FalseDifficulty:Easy23.Maximizingrevenueistypicallytheobjectivewhenmarketingandsalesmakethepromotionandpricingdecisions.Answer:TrueDifficulty:Easy24.Pricingdecisionsbasedonlyonrevenueconsiderationsoftenresultinanincreaseinoverallprofitability.Answer:FalseDifficulty:Moderate25.Thecombinationofpricingandaggregateplanning(bothdemandandsupplymanagement)canbeusedtomaximizesupplychainprofitability.Answer:TrueDifficulty:Moderate26.Whenperformingaggregateplanning,thegoalofallfirmsinthesupplychainshouldbetomaximizeindividualfirmprofits.Answer:FalseDifficulty:Moderate27.Determininghowprofitswillbeallocatedtodifferentmembersofthesupplychainisakeytosuccessfulcollaboration.Answer:TrueDifficulty:Moderate28.Ingeneral,asthefractionofincreaseddemandcomingfromforwardbuyinggrows,offeringthepromotionduringthepeakdemandperiodbecomesmoreattractive.Answer:FalseDifficulty:Moderate29.Offeringapromotionduringapeakperiodthathassignificantforwardbuyingcreatesevenmorevariabledemandthanbeforethepromotion.Answer:TrueDifficulty:Easy30.Averageinventorydecreasesifapromotionisrunduringthepeakperiodandincreasesifthepromotionisrunduringtheoff-peakperiod.Answer:FalseDifficulty:Easy31.Promotingduringapeakdemandmonthmaydecreaseoverallprofitabilityifasignificantfractionofthedemandincreaseresultsfromaforwardbuy.Answer:TrueDifficulty:Hard32.Asforwardbuyingbecomesasmallerfractionofthedemandincreasefromapromotion,itislessprofitabletopromoteduringthepeakperio